Ethylene via Ethanol Dehydration, Part 2 by Intratec Solutions

Ethylene via Ethanol Dehydration, Part 2

#TEC013A Technology Economics Ethylene via Ethanol Dehydration, Part 2 2013

Abstract One of the most important petroleum-derived products, ethylene is known as a key building block for the petrochemical industry. Ethylene is most frequently produced via steam cracking of petroleum-based feedstock. Rising oil prices coupled with global concerns about sustainability and global warming have motivated research into ethylene manufacture from renewable sources. Renewable-based or â&#x20AC;&#x153;greenâ&#x20AC;? chemicals products are slowly emerging and entering the market. Ethylene made from ethanol (from corn, sugarcane or lignocellulosic biomass) presents the primary advantage of being made from CO2 removed from the atmosphere, reducing greenhouse gas lifetime emissions from the ethylene manufacture process as well as dependence of the chemical industry on fossil-fuels. This study presents an assessment of the economic potential of research involving a process for the production of ethylene via ethanol dehydration, similar to the one suggested by BP Chemicals in a patent application. Included in the analysis is a technical overview of the proposed process, presenting description, flow diagrams and material balance. Based on BP Chemicals patent data, the process was simulated and served as the basis for estimating both the capital investment and the operating costs of a commercial scale plant based on this emerging process. In addition, a sensitivity analysis was performed to evaluate the impact of key technical aspects and economic variables on capital and operating expenses. The analysis assesses the effects of variations in raw material and utility prices, reaction conversions, and the formation of undesired by-products on the economic performance of the process. The economic analysis presented in the study is based on a plant producing 190 kta of polymer grade ethylene. The estimated total capital expenditure (CAPEX) for such a plant on the US Gulf Coast is about USD 230 million. The analysis performed indicates that a green ethylene plant relying on the process suggested by BP Chemicals must be able to sell the product at a price of about USD 1,700 per metric ton in order to become a profitable venture. This means that eco-friendly ethylene must be valued at a premium about 40% higher than that of fossil-based ethylene.

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Terms & Conditions Information, analyses and/or models herein presented are prepared on the basis of publicly available information and non-confidential information disclosed by third parties. Third parties, including, but not limited to technology licensors, trade associations or marketplace participants, may have provided some of the information on which the analyses or data are based. Intratec Solutions LLC (known as “Intratec”) does not believe that such information will contain any confidential information but cannot provide any assurance that any third party may, from time to time, claim a confidential obligation to such information. The aforesaid information, analyses and models are developed independently by Intratec and, as such, are the opinion of Intratec and do not represent the point of view of any third parties nor imply in any way that they have been approved or otherwise authorized by third parties that are mentioned in this publication. The application of the solutions presented in this publication without license from the owners infringes on the intellectual property rights of the owners, including patent rights, trademark rights, and rights to trade secrets and proprietary information. Intratec conducts analyses and prepares publications and models for readers in conformance with generally accepted professional standards. Although the statements in this publication are derived from or based on several sources that Intratec believe to be reliable, Intratec does not guarantee their accuracy, reliability, or quality; any such information, or resulting analyses, may be incomplete, inaccurate or condensed. All estimates included in this publication are subject to change without notice. This publication is for informational purposes only and is not intended as any recommendation of investment. Reader agrees it will not, without prior written consent of Intratec, represent, directly or indirectly, that its products have been approved or endorsed by the other parties.

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Contents About this Study...................................................................................................................................................................8 Object of Study.....................................................................................................................................................................................................................8 Analyses Performed ...........................................................................................................................................................................................................8 Study Bases..............................................................................................................................................................................................................................9 Design Bases .....................................................................................................................................................................................................................................9 Economic Basis ................................................................................................................................................................................................................................9

Study Background ............................................................................................................................................................ 10 About Ethylene..................................................................................................................................................................................................................10 Introduction....................................................................................................................................................................................................................................10 Applications....................................................................................................................................................................................................................................10

Manufacturing Alternatives .......................................................................................................................................................................................10 Bibliographic Review......................................................................................................................................................................................................11 Main Reference.............................................................................................................................................................................................................................11 Complementary References ................................................................................................................................................................................................12 Extra References...........................................................................................................................................................................................................................13 Related Publications History.................................................................................................................................................................................................13

Technical Analysis ............................................................................................................................................................. 14 Chemistry ..............................................................................................................................................................................................................................14 Raw Material ........................................................................................................................................................................................................................14 Technology Overview ...................................................................................................................................................................................................15 Process Description & Estimated Conceptual Flow Diagram...............................................................................................................16 Area 100: Treatment..................................................................................................................................................................................................................16 Area 200: Reaction......................................................................................................................................................................................................................16 Area 300: Purification................................................................................................................................................................................................................16 Process Performance ................................................................................................................................................................................................................17

ISBL Major Equipment List ..........................................................................................................................................................................................20 OSBL Major Equipment List .......................................................................................................................................................................................22 Technical Bases & Assumptions ..............................................................................................................................................................................23

Economic Analysis ............................................................................................................................................................ 24 Capital Expenditures.......................................................................................................................................................................................................24 Fixed Investment.........................................................................................................................................................................................................................24 2

Working Capital............................................................................................................................................................................................................................25 Other Capital Expenses ...........................................................................................................................................................................................................25 Total Capital Expenses .............................................................................................................................................................................................................26

Operational Expenditures ...........................................................................................................................................................................................26 Manufacturing Costs.................................................................................................................................................................................................................26

Economic Datasheet ......................................................................................................................................................................................................26

Economic Discussion ....................................................................................................................................................... 28 Sensitivity Analysis ...........................................................................................................................................................................................................28 Plant Capacity and Prices Variation..................................................................................................................................................................................28 Technical Parameters Variation..........................................................................................................................................................................................29 Profitability Sensitivity ..............................................................................................................................................................................................................32

Remarks ..................................................................................................................................................................................................................................33

References............................................................................................................................................................................ 34 Acronyms, Legends & Observations .......................................................................................................................... 35 Technology Economics Methodology ...................................................................................................................... 36 Introduction.........................................................................................................................................................................................................................36 Workflow................................................................................................................................................................................................................................36 Capital & Operating Cost Estimates ......................................................................................................................................................................38 ISBL Investment............................................................................................................................................................................................................................38 OSBL Investment.........................................................................................................................................................................................................................38 Working Capital............................................................................................................................................................................................................................39 Other Capital Expenses ...........................................................................................................................................................................................................39 Manufacturing Costs.................................................................................................................................................................................................................40

Contingencies ....................................................................................................................................................................................................................40 Accuracy of Economic Estimates............................................................................................................................................................................41 Location Factor ..................................................................................................................................................................................................................41

Appendix A. Mass Balance & Streams Properties.................................................................................................. 43 Appendix B. Utilities Consumption Breakdown .................................................................................................. 45 Appendix C. Carbon Footprint..................................................................................................................................... 46 Appendix D. Pilot Plant Construction........................................................................................................................ 47 Appendix E. Detailed Capital Expenses .................................................................................................................... 48 Direct Costs Breakdown ...............................................................................................................................................................................................48 Indirect Costs Breakdown ...........................................................................................................................................................................................49 3

Appendix F. Economic Assumptions ......................................................................................................................... 50 Capital Expenditures.......................................................................................................................................................................................................50 Working Capital............................................................................................................................................................................................................................50 Other Capital Expenses ...........................................................................................................................................................................................................50

Operational Expenditures ...........................................................................................................................................................................................50 Historical Prices for Ethanol........................................................................................................................................................................................51

Appendix G. Released Publications............................................................................................................................ 52 Appendix H. Request Submitted to Intratec........................................................................................................... 53 Subject of the Publication...........................................................................................................................................................................................53 Remarks and Comments .............................................................................................................................................................................................53

List of Tables Table 1 –Design Bases.......................................................................................................................................................................................................................9 Table 2 – Storage and Utility Assumptions..........................................................................................................................................................................9 Table 3 – Fixed Investment and Pricing Basis ....................................................................................................................................................................9 Table 4 – Major Ethylene Consumers...................................................................................................................................................................................10 Table 5 – Raw Materials & Utilities Consumption (per ton of Product)...........................................................................................................17 Table 6 –Labor Requirements...................................................................................................................................................................................................17 Table 7 – Main Streams Operating Conditions and Composition .....................................................................................................................20 Table 8 – Inside Battery Limits Major Equipment List ................................................................................................................................................20 Table 9 – Outside Battery Limits Major Equipment List............................................................................................................................................22 Table 10 – Technical Bases..........................................................................................................................................................................................................23 Table 11 - Design Assumptions Adopted..........................................................................................................................................................................23 Table 12 – General Assumptions.............................................................................................................................................................................................24 Table 13 – Bare Equipment Cost per Area (USD Thousands)................................................................................................................................24 Table 14 – Total Fixed Investment Breakdown (USD Thousands)......................................................................................................................25 Table 15 – Working Capital (USD Million)..........................................................................................................................................................................25 Table 16 – Other Capital Expenses (USD Million)..........................................................................................................................................................26 Table 17 – CAPEX (USD Million) ...............................................................................................................................................................................................26 Table 18 – Manufacturing Fixed Cost (USD/ton) ..........................................................................................................................................................26 Table 19 – Manufacturing Variable Cost (USD/ton) ....................................................................................................................................................26 Table 20 – OPEX (USD/ton).........................................................................................................................................................................................................26 Table 21 – Technology Economics Datasheet: Green Ethylene from Ethanol Dehydration .............................................................27 Table 22 – Basis for By-Products Formation Sensitivity.............................................................................................................................................30 Table 23 – Financial Assumptions ..........................................................................................................................................................................................32 Table 24 – Project Contingency...............................................................................................................................................................................................40 Table 25 – Complexity Criteria Description......................................................................................................................................................................40 Table 26 – Accuracy of Economic Estimates ...................................................................................................................................................................41 Table 27 – Detailed Material Balance and Stream Properties................................................................................................................................43 Table 28 – Utilities Consumption Breakdown.................................................................................................................................................................45 Table 29 – Assumptions for CO2e Emissions Calculation........................................................................................................................................46 Table 30 – CO2e Emissions (ton/ton prod.)......................................................................................................................................................................46 Table 31 – Pilot Plant Construction Information ...........................................................................................................................................................47 Table 32 – Pilot Plant Construction Cost (USD Thousands) ...................................................................................................................................47 5

Table 33 – Indirect Costs Breakdown ...................................................................................................................................................................................49 Table 34 – Working Capital Assumptions..........................................................................................................................................................................50 Table 35 – Other Capital Expenses Assumptions..........................................................................................................................................................50 Table 36 – Other Fixed Cost Assumptions ........................................................................................................................................................................50 Table 37 – Depreciation Value & Assumptions ..............................................................................................................................................................50

List of Figures Figure 1 – Proposed Configuration to Produce Ethylene from Ethanol Dehydration..............................................................................8 Figure 2 – Ethylene from Multiple Sources.......................................................................................................................................................................11 Figure 3 – Layout Proposed by the Main Reference Used in the Study.........................................................................................................12 Figure 4 – Publications in Recent Years ..............................................................................................................................................................................13 Figure 5 – Process Block Flow Diagram ..............................................................................................................................................................................15 Figure 6 – Inside Battery Limits Conceptual Process Flow Diagram.................................................................................................................18 Figure 7 – Plant Capacity Effect on Total Fixed Investment (USD MM) ..........................................................................................................28 Figure 8 – Raw Material and Utilities Prices Effects on Manufacturing Costs (USD/Metric Ton of Product)............................28 Figure 9 – Ethanol Conversion Effects on Total Fixed Investment (USD MM)............................................................................................29 Figure 10 – Ethanol Conversion Effects on Manufacturing Expenses (USD/Metric Ton of Product) ...........................................29 Figure 11 – Process Changes Due to By-Products Formation..............................................................................................................................30 Figure 12 – By-Products Formation Effects on Total Fixed Investment (USD MM) .................................................................................31 Figure 13 – By-Products Formation Effects on Manufacturing Expenses (USD/Metric Ton of Product)....................................31 Figure 14 – Internal Rate of Return for Different Pricing Scenarios ...................................................................................................................32 Figure 15 – Net Present Value for Different Pricing Scenarios (MM USD) .....................................................................................................33 Figure 16 – Methodology Flowchart....................................................................................................................................................................................37 Figure 17 – Location Factor Composition.........................................................................................................................................................................41 Figure 18 – ISBL Direct Costs Breakdown by Equipment Type............................................................................................................................48 Figure 19 – OSBL Direct Costs Breakdown by Equipment Type .........................................................................................................................48 Figure 20 – Historical Ethanol Prices.....................................................................................................................................................................................51

About this Study This study follows the same pattern as all Technology Economics studies developed by Intratec and is based on the same rigorous methodology and well-defined structure (chapters, type of tables and charts, flow sheets, etc.). The subject of this assessment was defined by a major player in the chemical and allied industries sector through Intratec’s website. The submitted request is presented in “Appendix H. ” In this chapter you will find a summary of all inputs and assumptions used to develop the current technology evaluation. All required data were gathered by our team of specialists from publicly available information, Intratec’s inhouse databases, and process design standards.

Object of Study This assignment assesses the economic potential of an exploratory technology used to produce ethylene from ethanol. The process was proposed by BP Chemicals in the US patent 2009/0082605. For more details regarding the references used to support this study, please review the section “Bibliographic Review.” An overview of the technology can be seen in the figure below.

Analyses Performed The current study comprises the following analyses: Process Synthesis & Design. This involves the synthesis of various process configurations to produce the desired product in a safe, reliable and economic manner. At the end of the synthesis step, the best process configuration analyzed is presented in detail: process description, conceptual process flow diagram, material and energy balance, key process indicators, equipment sizing, etc. Capital Cost Estimation. For a concept to become an operating industrial plant, significant funding must be available to purchase and install equipment. In addition, capital is required to pay the expenses involved in the operation before sales revenue becomes available. This study estimates the entire capital cost required to realize the desired concept. Manufacturing Cost Estimation. Determining the total cost of operating the plant, selling the product, and other corporate expenses is a crucial component of an economic analysis.

Figure 1 – Proposed Configuration to Produce Ethylene from Ethanol Dehydration

Ethanol and Diethyl Ether Recycle

Intratec | Study Background

Ethanol

Reaction Step (Ethanol Dehydration)

Purification Step (Columns)

Ethylene

Water

Source: Intratec – www.intratec.us

Product Price Estimation. This is based on the sum of all manufacturing costs, recovery of the capital invested and the anticipated profit margin. The estimated price indicates the minimum product sales price required to make the assessed technology economically attractive. Sensitivity Analysis. Evaluation of the key technical and economic variables impact on capital and operating expenses is a vital part of the study. The charts presented in the “Economic Discussion” section help to determine where to focus research and development efforts. The current study measures how capital and/or operating expenses are impacted by the following variables:

The specific assumptions that supported the process synthesis are presented in the “Technical Analysis” chapter. An investment for the construction of a new chemical plant is greatly impacted by storage and utility assumptions. They are presented in Table 2.

Table 2 – Storage and Utility Assumptions Storage Capacity Feedstock & Chemicals

20 days of operation

End-products & By-products

Not included

Utility Facilities Included

Plant production capacity,

All required Control room, labs,

Support & Auxiliary Facilities

Raw material and utility prices,

maintenance shops, warehouses

Source: Intratec – www.intratec.us

Reaction conversion, Formation of undesired by-products.

Economic Basis

Study Bases The current study assesses the technical and economic aspects of a hypothetical industrial plant based on the exploratory technology described above. The plant is located on the US Gulf Coast and produces 190 kta of ethylene. The economic analysis is based on data gathered on Q3 2012.

This study considers the economic performance of a plant constructed and operating under the following circumstances.

Table 3 – Fixed Investment and Pricing Basis FIXED INVESTMENT Location Factor

The technical analysis is based on rigorous simulation models, which support the design of the chemical process, unit operations, equipment and OSBL facilities. The general design assumptions employed are depicted in Table 1. Table 1 –Design Bases Cooling Water Temperature

24 °C

Cooling Water Range

11 °C

Steam (Low Pressure)

7 Bar abs

Steam (Medium Pressure)

11 Bar abs

Refrigerant (Propylene)

-45 °C

Wet Bulb Air Temperature

25 °C

Source: Intratec – www.intratec.us

1.00

Relative to US Gulf Coast

Ethanol

800

USD/ton

Cooling Water

0.0004

USD/m3

LP Steam

12.3

USD/ton

Boiler Feed Water

0.01

USD/ton

Electricity

0.07

USD/kWh

Fuel

3.5

USD/MMBtu

Operator Salaries

58.6

USD/man-hour

Supervisor Salaries

88.0

USD/man-hour

PRICING

Source: Intratec – www.intratec.us

Intratec | Study Background

Design Bases

Study Background

Introduction

With such a diverse range of derivative products, ethylene demand is very sensitive to economic cycles. Therefore, it is often used as a reference in the performance evaluation of the petrochemical industry.

Ethylene is an unsaturated organic compound with the chemical formula C2H4. It has one double bond and is the simplest member of the alkene class of hydrocarbons.

Table 4 â&#x20AC;&#x201C; Major Ethylene Consumers

About Ethylene

Polyethylene Ethylene oxide

Ethylene 2D structure Ethylene glycol

Ethylene is primarily produced by the pyrolysis of hydrocarbons and by recovery from some refinery products. It can also be produced in other reactions, for example, in ethanol dehydration or methanol-to-olefins plants. One of the largest volume petrochemicals worldwide and the first in natural abundance, ethylene is a leading industrial chemical intermediate that serves as one of the building blocks for an array of chemical and plastic products. Commercial ethylene is a colorless, low-boiling, flammable gas with a sweet odor. It is commercially traded in polymer grade (min. 99.9% of purity).

Applications

Intratec | Study Background

Commercial ethylene major application in the chemical industry is as a raw material for the production of polyethylene and other organic chemicals that are mainly utilized in consumable end uses, especially in packaging.

The main use of ethylene is in the manufacture of plastics such as polyethylene, which accounts for about 60% of the global ethylene demand. The main class of polyethylene produced in the world is high density polyethylene (HDPE), which is responsible for the consumption of a third of the available ethylene, followed by low density (LDPE) and linear low density (LLDPE) varieties. Other important products derived from ethylene are ethylene oxide, an intermediate to ethylene glycol synthesis, ethylene dichloride, styrene, and vinyl acetate.

Ethylene dichloride Styrene

Vinyl acetate

Adhesives, packaging, bags, piping Ethylene glycol, ethoxylates (non-ionic surfactants) Polyester, polyethylene terephthalate, automotive antifreeze Vinyl chloride (monomer for PVC) Polystyrene, ABS, rubbers, plastics, fiberglass, pipes Polyvinyl acetate, emulsion polymers, resins

Source: Intratec â&#x20AC;&#x201C; www.intratec.us

Manufacturing Alternatives Ethylene is mainly produced by steam cracking of oil fractions, as NGL, and LPG, but, mainly as naphtha. Additionally, research efforts have been made to create alternatives to manufacture less energy-consuming oilindependent ethylene. However, researchers have not yet found better options to the cracking process. In steam cracking, the oil fraction diluted with steam is fed into a radiant tube reactor, where fire is externally provided in order to supply the energy required for the reaction completion. This process enables the utilization of different types of coils, radiation tubes, and furnaces. The main difference between thermal and steam cracking is that the latter uses high temperatures and low pressures, favoring olefins production. In this sense, dilution of the feed stream with steam reduces the partial pressure of reactants and helps to avoid coke formation in the reaction system, which is also prevented by slow residence times.

As the reaction occurs within this furnace, various mechanisms are assumed to represent the process. In the very beginning (with a low conversion rate), a free-radical decomposition is assumed for the system. Once the conversion increases, the more acceptable mechanism includes condensation reactions to form cyclic components. Another technique is also being employed: Methanol-to-Olefins. A group of technologies that first converts synthesis gas (syngas) to methanol, and then converts the methanol to ethylene and/or propylene. The process also produces water as a byproduct. Synthesis gas is produced from the reformation of natural gas or by the steam-induced reformation of petroleum products such as naphtha, or by gasification of coal. A large amount of methanol is required to make a world-scale ethylene and/or propylene plant.

Bibliographic Review Since limited information is available for exploratory technologies, patents and articles had to be researched to aid in the process synthesis and design. This section highlights important topics from key references used in this publication.

Figure 2 â&#x20AC;&#x201C; Ethylene from Multiple Sources

Naphtha NGL LPG

Steam Cracker

(Green) Ethanol

Ethanol Dehydration

Source: Intratec â&#x20AC;&#x201C; www.intratec.us

MTO/MTP Intratec | Study Background

Methanol

PG Ethylene

Figure 3 â&#x20AC;&#x201C; Layout Proposed by the Main Reference Used in the Study

Intratec | Study Background

Source: US patent 2009/0082605, from BP Chemicals

Source: Intratec – www.intratec.us

Intratec | Study Background

Figure 4 – Publications in Recent Years

Technical Analysis Raw Material Ethanol, or ethyl alcohol [CH3CH2OH], is a volatile, flammable, and colorless liquid (pure form). It is miscible in all proportions with water, ether, acetone, benzene, and some other organic solvents.

Ethanol

Ethylene

Water

Formation of ether intermediate can also occur in dehydration reactions:

Ethanol

Diethyl ether

Ethanol

Water

Ethylene

Intratec | Technical Analysis

High temperatures favor the ethylene, while low temperatures favor production of diethyl ether. High process temperatures also provoke thermal cracking reactions, which generate undesirable by-products such as coke and alkanes.

Ethanol has been produced by the fermentation of carbohydrates for thousands of years. In the 1930s, low oil prices enabled the production of industrial ethanol through direct and indirect hydration of petroleum-derived ethylene. The rising cost of crude petroleum has prompted research into the industrial manufacture of ethanol from biomass sources. Ethanol from biomass can be produced by the fermentation of starch (from corn), sugar (from sugarcane) or waste lignocellulosic biomass (such as corn stover or switch grass). The process varies depending on the feedstock used. Due to governmentsâ&#x20AC;&#x2122; programs and technology advances, biomass has become the lowest cost raw material for ethanol production. Currently, ethanol is almost exclusively obtained from biomass and has become a renewable-based chemical. Global concerns about sustainability and global warming have inspired research into the use of renewable ethanol for ethylene manufacture, substituting petroleumderived ethylene.

Technology Overview The process for green ethylene production described in the study consists of three areas: (1) Treatment; (2) Reaction; and (3) Purification. The simplified block flow diagram presented in Figure 5 summarizes the process. Fresh ethanol is combined with the recycled ethanol and diethyl ether and sent to the treatment area to remove unwanted by-products such as acetaldehyde and C4 hydrocarbons (primarily butylenes) that are generated in the reaction.

The resultant stream is then sent to the purification area, which comprises a set of distillation columns. In the purification area, the water formed in the dehydration step is removed. The unreacted ethanol and diethyl ether are recycled to the treatment area. The final product is a polymer grade ethylene stream. There is no need for further purification, since the formation of ethane is minimized by the mild reaction conditions.

The treated stream is sent to vapor-phase dehydration reactors containing a heteropolyacid catalyst. In the reactors, ethanol is converted to ethylene.

Figure 5 â&#x20AC;&#x201C; Process Block Flow Diagram

Ethanol and Diethyl ether Recycle

Ethanol

Area 100 Treatment

Removed Hydrocarbon (to fuel)

Area 200 Reaction

Area 300 Purification

PG Ethylene

Water

Intratec | Technical Analysis

Source: BP Chemicals patent, Intratec analysis

Intratec | Technical Analysis

Process Performance Table 5 presents the process key performance indicators (KPI), while Table 6 shows the labor requirements.

Table 5 – Raw Materials & Utilities Consumption (per ton of Product)

Source: Intratec – www.intratec.us

Table 6 –Labor Requirements

Intratec | Technical Analysis

Source: Intratec – www.intratec.us

Intratec | Technical Analysis

Figure 6 – Inside Battery Limits Conceptual Process Flow Diagram

Source: Intratec – www.intratec.us

Intratec | Technical Analysis

Figure 6 – Inside Battery Limits Conceptual Process Flow Diagram (Cont.)

Table 7 presents the main streams composition and operating conditions. For a more complete material balance, see the “Appendix A. Mass Balance & Streams Properties”.

Intratec | Technical Analysis

Information regarding utilities flow rates is provided in “Appendix B. Utilities Consumption Breakdown.”

For further details on greenhouse gas emissions caused by the process, see “Appendix C. Carbon Footprint.”

ISBL Major Equipment List Table 8 shows the equipment list by area. It also presents a brief description and the main materials used.

Intratec | Technical Analysis

OSBL Major Equipment List

Intratec | Technical Analysis

The OSBL is divided into three main areas: storage (Area 700), energy & water facilities (Area 800), and support & auxiliary facilities (Area 900).

Table 9 shows the list of tanks located in the storage section and the energy facilities required in the construction of the unit.

Intratec | Technical Analysis

Economic Analysis The general assumptions used in this economic analysis are outlined below.

Capital Expenditures Fixed Investment

Table 12 – General Assumptions

Table 13 shows the bare equipment cost associated with each area of the project.

Table 13 – Bare Equipment Cost per Area (USD Thousands)

Source: Intratec – www.intratec.us

Table 14 details the breakdown of the total fixed investment (TFI) per item (direct & indirect costs and process contingencies). For further information about the components of the TFI, please see the chapter “Technology Economics Methodology.”

Intratec | Economic Analysis

Fundamentally, the direct costs are the total direct material and labor costs associated with the equipment (including installation bulks). The total direct cost represents the total bare equipment installed cost.

“Appendix E. Detailed Capital Expenses” provides a detailed breakdown for the direct expenses, outlining the share of each type of equipment in total. After defining the total direct cost, the TFI is established by adding field indirects, engineering costs, overhead, contract fees and contingencies.

Working Capital Table 14 – Total Fixed Investment Breakdown (USD Thousands)

Working capital, described in Table 15, is another significant investment requirement. It is needed to meet the costs of labor; maintenance; purchase, storage, and inventory of field materials; and storage and sales of product(s). Assumptions for working capital calculations are found in “Appendix F. Economic Assumptions.”

Table 15 – Working Capital (USD Million)

Source: Intratec – www.intratec.us

Other Capital Expenses

Indirect costs are defined by the American Association of Cost Engineers (AACE) Standard Terminology as those "costs which do not become a final part of the installation but which are required for the orderly completion of the installation." The indirect project expenses are further detailed in ”Appendix E. Detailed Capital Expenses.” The Outside Battery Limits (OSBL) requirements–storage and utilities supply facilities – significantly impact the capital cost estimates for a new venture. Assumptions regarding the OSBL considered in the analysis are presented in the chapter “About this Study.”

Initial costs are not addressed in most estimation studies but can become a significant expenditure. For instance, the initial catalyst load in reactors may be a significant cost and, in this case, should also be included in the capital estimates. Other capital expenses frequently neglected are land acquisition and site development. Although these represent small percentages of the total capital expenses, they should be included.

Intratec | Economic Analysis

Source: Intratec – www.intratec.us

The start-up costs should also be considered in determining the total capital expenses. During this period, expenses are incurred for employee training, initial commercialization costs, manufacturing inefficiencies and unscheduled plant modifications (adjustment of equipment, piping, instruments, etc.).

Total Capital Expenses

Economic Datasheet

Table 17 presents a summary of the total Capital Expenditures (CAPEX) detailed in previous sections.

The Economic Datasheet, presented in Table 21, is an overall evaluation of the process costs.

Table 16 – Other Capital Expenses (USD Million)

Table 18 – Manufacturing Fixed Cost (USD/ton)

Source: Intratec – www.intratec.us

Table 19 – Manufacturing Variable Cost (USD/ton)

Table 17 – CAPEX (USD Million)

Source: Intratec – www.intratec.us

Operational Expenditures Manufacturing Costs

Intratec | Economic Analysis

The manufacturing costs, also called Operational Expenditures (OPEX), are composed of two elements: a fixed cost and a variable cost. All figures regarding operational costs are presented in USD per ton of product.

Table 18 shows the manufacturing fixed cost. To learn more about the assumptions for manufacturing fixed costs, see the “Appendix F. Economic Assumptions.” Table 19 discloses the manufacturing variable cost breakdown. Table 20 shows the OPEX of the presented process.

Source: Intratec – www.intratec.us

Table 20 – OPEX (USD/ton)

Source: Intratec – www.intratec.us

Intratec | Economic Analysis

Economic Discussion Sensitivity Analysis In order to evaluate the impact of the uncertainties inherent to exploratory technologies, sensitivity analyses were performed. Key inputs were varied to evaluate their impacts on the Total Fixed Investment and Manufacturing Costs of the process.

Plant Capacity and Prices Variation Figure 7 shows the Total Fixed Investment when considering the plant capacity variation. Figure 8 presents the Manufacturing Cost as a function of raw materials and utilities prices. In both charts, the base case evaluated in the study is represented as the zero in x-axis.

Figure 7 – Plant Capacity Effect on Total Fixed Investment (USD MM)

Source: Intratec – www.intratec.us

Intratec | Economic Discussion

Figure 8 – Raw Material and Utilities Prices Effects on Manufacturing Costs (USD/Metric Ton of Product)

Source: Intratec – www.intratec.us

Technical Parameters Variation The following parameters were altered to evaluate their impact on Total Fixed Investment and Manufacturing Costs: Ethanol conversion to ethylene; Formation of undesired by-products (carbon monoxide, carbon dioxide, and ethane).

Figure 9 – Ethanol Conversion Effects on Total Fixed Investment (USD MM)

Source: Intratec – www.intratec.us

Intratec | Economic Discussion

Figure 10 – Ethanol Conversion Effects on Manufacturing Expenses (USD/Metric Ton of Product)

Table 22 – Basis for By-Products Formation Sensitivity PRODUCT SELECTIVITY

BASE

(H2O-FREE BASIS, WT%)

CASE

Source: Intratec – www.intratec.us

Figure 11 – Process Changes Due to By-Products Formation

Intratec | Economic Discussion

Source: Intratec – www.intratec.us

Figure 12 – By-Products Formation Effects on Total Fixed Investment (USD MM)

Source: Intratec – www.intratec.us

Figure 13 – By-Products Formation Effects on Manufacturing Expenses (USD/Metric Ton of Product)

Intratec | Economic Discussion

Source: Intratec – www.intratec.us

Table 23 – Financial Assumptions

Source: Intratec – www.intratec.us

Figure 14 – Internal Rate of Return for Different Pricing Scenarios

Intratec | Economic Discussion

Source: Intratec – www.intratec.us

Figure 15 – Net Present Value for Different Pricing Scenarios (MM USD)

Intratec | Economic Discussion

Source: Intratec – www.intratec.us

Intratec | References

References

Acronyms, Legends & Observations AACE: American Association of Cost Engineers

PG: Polymer grade

C: Distillation, stripper, scrubber columns (e.g., C-101 would denote a column tag)

R: Reactors, treaters (e.g., R-101 would denote a reactor tag) RF: Refrigerant

C2, C3, ... Cn: Hydrocarbons with "n" number of carbon atoms

ROCE: Return on capital employed

C2=, C3=, ... Cn=: Alkenes with "n" number of carbon atoms

SB: Steam boiler

CAPEX: Capital expenditures

T: Tanks (e.g., T-101 would denote a tank tag)

CC: Distillation column condenser

TFI: Total Fixed Investment

CG: Chemical grade

TPC: Total process cost

CK Distillation column compressor

V: Horizontal or vertical drums, vessels (e.g., V-101 would denote a vessel tag)

CP: Distillation column reflux pump WD: Demineralized water CR: Distillation column reboiler CT: Cooling tower

X: Special equipment (e.g., X-101 would denote a special equipment tag)

CV: Distillation column accumulator drum

Obs.: 1 ton = 1 metric ton = 1,000 kg

E: Heat exchangers, heaters, coolers, condensers, reboilers (e.g., E-101 would denote a heat exchanger tag) F: Furnaces, fired heaters (e.g., F-101 would denote a furnace tag) IC Index: Intratec Chemical Plant Construction Index IP Indicator: Intratec Chemical Sector Profitability Indicator IRR: Internal Rate of Return

K: Compressors, blowers, fans (e.g., K-101 would denote a compressor tag) KPI: Key Performance Indicator kta: thousands metric tons per year NPV: Net Present Value OPEX: Operational Expenditures OSBL: Outside battery limits P: Pumps (e.g., P-101 would denote a pump tag)

Intratec | Acronyms, Legends & Observations

ISBL: Inside battery limits

Technology Economics Methodology Intratec Technology Economics methodology ensures a holistic, coherent and consistent techno-economic evaluation, ensuring a clear understanding of a chemical process technology.

Introduction The same general approach is used in the development of all Technology Economics assignments. To know more about Intratecâ&#x20AC;&#x2122;s methodology, see Figure 16. While based on the same methodology, all Technology Economics studies present uniform analyses with identical structures, containing the same chapters and similar tables and charts. This provides confidence to everyone interested in Intratecâ&#x20AC;&#x2122;s services since they will know upfront what they will get.

Workflow Once the scope of the study is fully defined and understood, Intratec conducts a comprehensive bibliographical research in order to understand technical aspects involved with the process analyzed.

Intratec | Technology Economics Methodology

Subsequently, the Intratec team simultaneously develops the process description and the conceptual process flow diagram based on:

Patent and technical literature research

Non-confidential information provided by technology licensors

Intratec's in-house database

Process design skills

Next, all the data collected are used to build a rigorous steady state process simulation model in Aspen Hysys and/or Aspen Plus, leading commercial process flowsheeting software tools.

From this simulation, material balance calculations are performed around the process, key process indicators are identified and main equipment listed. Equipment sizing specifications are defined based on Intratec's equipment design capabilities and an extensive use of AspenONE Engineering Software Suite that enables the integration between the process simulation developed and equipment design tools. Both equipment sizing and process design are prepared in conformance with generally accepted engineering standards. Then, a cost analysis is performed targeting ISBL & OSBL fixed capital costs, manufacturing costs, and overall working capital associated with the examined process technology. Equipment costs are primarily estimated using Aspen Process Economic Analyzer (formerly Aspen Icarus) customized models and Intratec's in-house database. Cost correlations and, occasionally, vendor quotes of unique and specialized equipment may also be employed. Next, capital and operating costs are assembled in Microsoft Excel spreadsheets, and an economic analysis of such technology is performed. Finally, sensitivity analyses are conducted to assess the impact of key economic variables on capital and operating expenses. According to the demand of the client who requests the Technology Economics study, the publication may also include additional analyses. Among other possibilities, the study may include sensitivity assessments to evaluate the impact of technical parameters on capital and manufacturing costs, as well as a regional comparison evaluating the economic performance of similar industrial units operating in different world regions.

Figure 16 – Methodology Flowchart

Study Understanding Validation of Project Inputs Patent and Technical Literature Databases

Non-Confidential Information from Technology Licensors or Suppliers

Bibliographical Research

Technical Validation – Process Description & Flow Diagram

Vendor Quotes

Material & Energy Balances, Key Process Indicators, List of Equipment & Equipment Sizing

Pricing Data Gathering: Raw Materials, Chemicals, Utilities and Products

Capital Cost (CAPEX) & Operational Cost (OPEX) Estimation

Construction Location Factor (http://base.intratec.us)

Economic Analysis

Final Review & Adjustments

Project Development Phases Information Gathering / Tools

Source: Intratec – www.intratec.us

Aspen Plus, Aspen Hysys Aspen Exchanger Design & Rating, KG Tower, Sulcol and Aspen Energy Analyzer

Aspen Process Economic Analyzer, Aspen Capital Cost Estimator, Aspen InPlant Cost Estimator & Intratec In-House Database

Intratec | Technology Economics Methodology

Intratec Internal Database

Capital & Operating Cost Estimates The cost estimate presented in the current study considers a process technology based on a standardized design practice that is typical of a major chemical company. The specific design standards employed can have a significant impact on capital costs. The basis for the capital cost estimate is that the plant is considered to be built in a clear field with a typical large single-line capacity. In comparing the cost estimate hereby presented with an actual project cost or contractor's estimate, the following must be considered:

ISBL Investment The ISBL investment includes the fixed capital cost of the main processing units of the plant necessary to the manufacturing of products. The ISBL investment includes the installed cost of the following items: Process equipment (e.g., reactors and vessels, heat exchangers, pumps, compressors, etc.) Process equipment spares Housing for process units Pipes and supports within the main process units

Minor differences or details (many times, overlooked) between similar processes can significantly affect cost.

Instruments, control systems, electrical wires and other hardware

The research progress can change the process layout and impact both capital and operating costs.

Foundations, structures and platforms Insulation, paint and corrosion protection

The omission of process areas in the design considered may invalidate comparisons with the estimated cost presented. Industrial plants may be overdesigned for particular objectives and situations.

In addition to the direct material and labor costs, the ISBL addresses indirect costs, such as construction overheads, including: payroll burdens, field supervision, equipment rentals, tools, field office expenses, temporary facilities, etc.

OSBL Investment Rapid fluctuation of equipment or construction costs may invalidate cost estimates. Equipment vendors or engineering companies may provide goods or services below profit margins during economic downturns.

Intratec | Technology Economics Methodology

Specific locations may impose higher taxes and fees, which can impact costs considerably.

In addition, no matter how much time and effort are devoted to accurately estimating costs, errors may occur due to the aforementioned factors, as well as cost and labor changes, construction problems, weather-related issues, strikes, or other unforeseen situations. This is partially considered in the project contingency. Finally, it must always be remembered that an estimated project cost is not an exact number, but rather is a projection of the probable cost.

The OSBL investment accounts for auxiliary items necessary to the functioning of the production unit (ISBL), but which perform a supporting and non-plant-specific role. OSBL items considered may vary from process to process. The OSBL investment could include the installed cost of the following items: Storage and packaging (storage, bagging and a warehouse) for products, feedstocks and by-products Steam units, cooling water and refrigeration systems Process water treating systems and supply pumps Boiler feed water and supply pumps Electrical supply, transformers, and switchgear Auxiliary buildings, including all services and equipment of: maintenance, stores warehouse, laboratory, garages, fire station, change house, cafeteria, medical/safety, administration, etc.

General utilities including plant air, instrument air, inert gas, stand-by electrical generator, fire water pumps, etc. Pollution control, organic waste disposal, aqueous waste treating, incinerator and flare systems

Working Capital For the purposes of this study,1 working capital is defined as the funds, in addition to the fixed investment, that a company must contribute to a project. Those funds must be adequate to get the plant into operation and to meet subsequent obligations.

tanks (assumed to be 1 day of manufacturing expenses). Supplies and stores. Parts inventory and minor spare equipment (estimated as a percentage of total maintenance materials costs for both ISBL and OSBL). Cash on hand. An adequate amount of cash on hand to give plant management the necessary flexibility to cover unexpected expenses (estimated as a certain period – in days – of manufacturing expenses).

Other Capital Expenses Research and Development

Accounts receivable. Products and by-products shipped but not paid by the customer; it represents the extended credit given to customers (estimated as a certain period – in days – of manufacturing expenses plus depreciation). Accounts payable. A credit for accounts payable such as feedstock, catalysts, chemicals, and packaging materials received but not paid to suppliers (estimated as a certain period – in days – of manufacturing expenses). Product inventory. Products and by-products (if applicable) in storage tanks. The total amount depends on sales flow for each plant, which is directly related to plant conditions of integration to the manufacturing of product‘s derivatives (estimated as a certain period – in days – of manufacturing expenses plus depreciation, defined by plant integration circumstances). Raw material inventory. Raw materials in storage tanks. The total amount depends on raw material availability, which is directly related to plant conditions of integration to raw material manufacturing (estimated as a certain period – in days – of raw material delivered costs, defined by plant integration circumstances). In-process inventory. Material contained in pipelines and vessels, except for the material inside the storage 1

The accounting definition of working capital (total current assets minus total current liabilities) is applied when considering the entire company.

Expenses associated with researches to carry the process through to commercial scale. This portion of capital expenses is difficult to estimate due to the uncertainties surrounding the research phase. A value ranging from 2 to 5% of the total fixed investment is used. Site Development Land acquisition and site preparation, including roads and walkways, parking, railroad sidings, lighting, fencing, sanitary and storm sewers, and communications. Start-up Expenses There are certain one-time expenses related to bringing a process on stream. From the standpoint of time, a variable undefined period exists between the nominal end of construction and the production of quality product in the quantity required. This period is commonly referred to as start-up. During the start-up period, expenses are incurred for operator and maintenance employee training, temporary construction, auxiliary services, testing and adjustment of equipment, piping, and instruments, etc. Our method of estimating start-up expenses consists of four components: Labor component. Represents costs of plant crew training for plant start-up, estimated as a certain number of days of total plant labor costs (operators, supervisors, maintenance personnel and laboratory labor). Commercialization cost. Dependent on raw materials and products negotiation, on how integrated the plant is with feedstock suppliers and consumer facilities, and

Intratec | Technology Economics Methodology

The initial amount of working capital is regarded as an investment item. This study uses the following items/assumptions for working capital estimation:

on the maturity of the technology. This ranges from 0.5% to 5% of the annual manufacturing expenses. Start-up inefficiency. Takes into account those operating runs when production cannot be maintained or there are false starts. The start-up inefficiency varies according to the process maturity: 5% for new and unproven processes, 2% for new and proven processes, and 1% for existing licensed processes, based on annual manufacturing expenses.

complexity of the process are decisive for its evaluation. Errors that occur may be related to: Uncertainty in process parameters, such as severity of operating conditions and quantity of recycles Addition and integration of new process steps Estimation of costs through scaling factors Off-the-shelf equipment

Unscheduled plant modifications. The risk that the product(s) may not meet specifications required by the market is a key fault that can occur during the start-up of the plant. As a result, equipment modifications or additions may be necesssary.

Manufacturing Costs Manufacturing costs do not include post-plant costs, which are very company specific. These consist of sales, general and administrative expenses, packaging, research and development costs, shipping, etc.

Hence, process contingency is also a function of the maturity of the technology, and is usually a value between 5% and 25% of the direct costs. The project contingency is largely dependent on the plant complexity and reflects how far the conducted estimation is from the definitive project, which includes, from the engineering point of view, site data, drawings and sketches, suppliers’ quotations and other specifications. In addition, during construction some constraints are verified, such as: Project errors or incomplete specifications

Operating labor and maintenance costs are estimated subjectively on the basis of the number of major equipment items and similar processes, as noted in the literature. Plant overhead includes all other non-maintenance (labor and materials) and non-operating labor costs for services associated with the product manufacture. Such overheads do not include costs to develop or market the product. G & A expenses represent general and administrative costs incurred during production such as: administrative salaries/expenses, research & development, product distribution and sales costs.

Intratec | Technology Economics Methodology

Contingencies

Contingency constitutes an addition to capital cost estimations, implemented based on uncertainties that may incur, to some degree, cost increases. According to recommended practice, two kinds of contingencies are assumed and applied to TPC: process contingency and project contingency.

Strike, labor costs changes and weather problems

Table 24 – Project Contingency Plant Complexity

Complex

Typical

Simple

Project Contingency

40%

30%

25%

Source: Intratec – www.intratec.us

Intratec’s definitions related to complexity are presented in the following:

Table 25 – Complexity Criteria Description Simple

Somewhat simple, widely known processes

Typical

Regular process

Complex

Process contingency is utilized in an effort to lessen the impact of absent technical information or the uncertainty of that which is obtained. In that manner, the reliability of the information gathered, its amount and the inherent

Several unit operations, extreme temperature or pressure, more instrumentation

Source: Intratec – www.intratec.us

Accuracy of Economic Estimates The accuracy of estimates gives the realized range of plant cost. The reliability of the technical information available is of major importance.

Table 26 – Accuracy of Economic Estimates

Reliability

Accuracy

Very

Low

Moderate

High

+ 50%

+ 40%

+ 30%

+ 20%

- 30%

- 25%

- 20%

- 15%

High

Source: Intratec – www.intratec.us

The non-uniform spread of accuracy ranges (+50 to – 30 %, rather than ±40%, e.g.) is justified by the fact that the unavailability of complete technical information usually results in underestimating rather than overestimating project costs.

Location Factor

A properly estimated location factor is a powerful tool, both for comparing available investment data and evaluating which region may provide greater economic attractiveness for a new industrial venture. Considering this, Intratec has developed a well-structured methodology for calculating Location Factors, and the results are presented for specific regions’ capital costs comparison. Intratec’s Location Factor takes into consideration the differences in productivity, labor costs, local steel prices, equipment imports needs, freight, taxes and duties on imported and domestic materials, regional business environments and local availability of sparing equipment. For such analyses, all data were taken from international statistical organizations and from Intratec’s database. Calculations are performed in a comparative manner, taking a US Gulf Coast-based plant as the reference location. The final Location Factor is determined by four major indexes: Business Environment, Infrastructure, Labor, and Material. The Business Environment Factor and the Infrastructure Factor measure the ease of new plant installation in different countries, taking into consideration the readiness of bureaucratic procedures and the availability and quality of ports or roads.

Economic regional comparisons eventually presented in Technology Economics studies are based on location factors. A location factor is an instantaneous, total cost factor used for converting a base project cost from one geographic location to another. Figure 17 – Location Factor Composition

Material Index Domestic Material Index Relative Steel Prices Labor Index Taxes and Freight Rates Spares Imported Material Taxes and Freight Rates Spares

Source: Intratec – www.intratec.us

Labor Index Local Labor Index Relative Salary Productivity Expats Labor

Infrastructure Factor Ports, Roads, Airports and Rails (Availability and Quality) Communication Technologies Warehouse Infrastructure Border Clearance Local Incentives

Business Environment Factor Readiness of Bureaucratic Procedures Legal Protection of Investors Taxes

Intratec | Technology Economics Methodology

Location Factor

Labor and material, in turn, are the fundamental components for the construction of a plant and, for this reason, are intrinsically related to the plant costs. This concept is the basis for the methodology, which aims to represent the local discrepancies in labor and material. Productivity of workers and their hourly compensation are important for the project but, also, the qualification of workers is significant to estimating the need for foreign labor. On the other hand, local steel prices are similarly important, since they are largely representative of the costs of structures, piping, equipment, etc. Considering the contribution of labor in these components, workersâ&#x20AC;&#x2122; qualifications are also indicative of the amount that needs to be imported. For both domestic and imported materials, a Spare Factor is considered, aiming to represent the need for spare rotors, seals and parts of rotating equipment. The sum of the corrected TFI distribution reflects the relative cost of the plant, this sum is multiplied by the Infrastructure and the Business Environment Factors, yielding the Location Factor.

Intratec | Technology Economics Methodology

For the purpose of illustrating the conducted methodology, a block flow diagram is presented in Figure 17 in which the four major indexes are presented, along with some of their components.

Intratec | Appendix A. Mass Balance & Streams Properties

Intratec | Appendix B. Utilities Consumption Breakdown

Appendix C. Carbon Footprint The process’ carbon footprint can be defined as the total amount of greenhouse gas (GHG) emissions caused by the process operation. The emissions presented in this chapter only involve the target process operation. Calculations do not consider emissions caused by upstream processes that generate feedstocks or downstream processes that use any product or by-product. Also, carbon credits from green feedstocks, if the case, are not computed.

Table 29 – Assumptions for CO2e Emissions Calculation

Although it is difficult to precisely account for the total emissions generated by a process, it is possible to estimate the major emissions, which can be divided into: Direct emissions. Emissions caused by process waste streams combusted in flares. Indirect emissions. The ones caused by utilities generation or consumption, such as the emissions due to using fuel in furnaces for heating process streams. Fuel used in steam boilers, electricity generation, and any other emissions in activities to support process operation are also considered to be indirect emissions.

Source: Intratec – www.intratec.us

Table 30 – CO2e Emissions (ton/ton prod.)

In order to estimate the direct emissions, it is necessary to know the composition of the streams, as well as the oxidation factor. Estimation of indirect emissions requires specific data concerning the plant location, such as the local electric power generation profile, and on the plant resources, such as the type of fuel used.

Intratec | Appendix C. Carbon Footprint

The assumptions for the process carbon footprint calculation are presented in Table 29 and the results are provided in Table 30.

Source: Intratec – www.intratec.us

Equivalent carbon dioxide (CO2e) is a measure that describes the amount of CO2 that would have the same global warming potential of a given greenhouse gas, when measured over a specified timescale. All values and assumptions used in calculations are based on data provided by the Environment Protection Agency (EPA) Climate Leaders Program.

Appendix D. Pilot Plant Construction Pilot testing of new and unproven processes is a key step in the development and commercialization of new technologies. Of course, much of the important preliminary work associated with catalyst development and phase equilibrium is most efficiently (inexpensively) completed in the laboratory. However, problems associated with trace quantities of unwanted side products, difficult material handling problems, and multiple reaction steps are not easily scaledup from laboratory experiments. In such cases, specific unit operations or the entire process may be analyzed in pilot plants to gain a better insight into the proposed full-scale operation. Sometimes, the pilot plant serves a dual purpose of testing the process at an intermediate scale and producing enough material for customers and other interested parties to test. Table 31 presents general information related to the construction of a pilot plant for the technology approached in this study. Table 32 presents the total fixed investment required to construct such pilot plant.

Table 31 – Pilot Plant Construction Information

Table 32 – Pilot Plant Construction Cost (USD Thousands)

Source: Intratec – www.intratec.us

Intratec | Appendix D. Pilot Plant Construction

Source: Intratec – www.intratec.us

Appendix E. Detailed Capital Expenses Direct Costs Breakdown Figure 18 – ISBL Direct Costs Breakdown by Equipment Type

Intratec | Appendix E. Detailed Capital Expenses

Figure 19 – OSBL Direct Costs Breakdown by Equipment Type

Source: Intratec – www.intratec.us

Intratec | Appendix E. Detailed Capital Expenses

Appendix F. Economic Assumptions Operational Expenditures Fixed Costs Fixed costs are estimated based on the specific characteristics of the process. The fixed costs, like operating charges and plant overhead, are typically calculated as a percentage of the industrial labor costs, and G & A expenses are added as a percentage of the operating costs. Table 34 – Working Capital Assumptions Table 36 – Other Fixed Cost Assumptions

Source: Intratec – www.intratec.us

Intratec | Appendix F. Economic Assumptions

Table 35 – Other Capital Expenses Assumptions

Table 37 – Depreciation Value & Assumptions

Source: Intratec – www.intratec.us

Intratec | Appendix F. Economic Assumptions

Source: Intratec â&#x20AC;&#x201C; www.intratec.us

Appendix G. Released Publications The list below is intended to be an easy and quick way to identify Intratec reports of interest. For a more complete and up-to-date list, please visit the Publications section on our website, www.intratec.us. TECHNOLOGY ECONOMICS Propylene Production via Metathesis: Propylene production via metathesis from ethylene and butenes, in a process similar to Lummus OCT. Propylene Production via Propane Dehydrogenation: Propane dehydrogenation (PDH) process conducted in moving bed reactors, in a process similar to UOP OLEFLEX™. Propylene Production from Methanol: Propylene production from methanol, in a process is similar to Lurgi MTP®. Polypropylene Production via Gas Phase Process: A gas phase type process similar to the Dow UNIPOL™ PP process to produce both polypropylene homopolymer and random copolymer. Polypropylene Production via Gas Phase Process, Part 2: A gas phase type process similar to Lummus NOVOLEN® for production of both homopolymer and random copolymer.

Intratec | Appendix G. Released Publications

Sodium Hypochlorite Chemical Production: Sodium hypochlorite (bleach) production, in a widely used industrial process, similar to that employed by Solvay Chemicals, for example.

Propylene Production via Propane Dehydrogenation, Part 2: Propane dehydrogenation (PDH) in fixed bed reactors, in a process is similar to Lummus CATOFIN®. Propylene Production via Propane Dehydrogenation, Part 3: Propane dehydrogenation (PDH) by applying oxydehydrogenation, in a process similar to the STAR PROCESS® licensed by Uhde.

Ethylene via Ethanol Dehydration: Ethylene production via ethanol dehydration, a process similar to that used by Chematur and Petron. LLDPE via Solution Process: A solution process similar to Nova Chemicals SCLAIRTECH™ technology for production of butene-based LLDPE (linear low density polyethylene). Ethylene via Ethanol Dehydration, Part 2: Ethylene production via ethanol dehydration using a process based in a patent published by BP Chemicals. IMPROVEMENT ECONOMICS Membranes on Polypropylene Plants Vent Recovery: The Report evaluates membrane units for the separation of monomer and nitrogen in PP plants, similar to the VaporSep® system commercialized by MTR. Use of Propylene Splitter to Improve Polypropylene Business: The report assesses the opportunity of purchasing the less valued RG propylene to produce the PG propylene raw material used in a PP plant.

Appendix H. Request Submitted to Intratec A major player in the chemical arena made the request for this publication at www.intratec.us (section â&#x20AC;&#x153;Ask for a New Publicationâ&#x20AC;?). Please find below the request submitted to Intratec. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Subject of the Publication Please describe the technology to be approached in the assessment: Point to a URL of reference

URL address:

Upload files

Describe the technology by yourself

http://www.freepatentsonline.com/y2009/0082605.pdf

Remarks and Comments Please provide any other information that may be relevant for the project description:

I need to evaluate the process for production of ethylene via ethanol dehydration described in the patent provided.

Intratec | Appendix H. Request Submitted to Intratec

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About Intratec Intratec is an independent research and leading advisory firm for the Chemical and Allied Industries, composed by a mix of consulting professionals, market researchers and skilled engineers with extensive industry experience. Established in 2002, Intratec has already provided more than 200 reliable, in-depth evaluations of process technologies for the Oil & Gas, Petrochemical, Chemical, Renewable and Energy industries. From this expertise, Intratec developed a consistent work methodology, continuously tested and proven by our clients.